You just took that big step into “adulting” and bought a home…the keys are in your hands… you’re out of the landlord/renter world…your move in day is finally here!
As you cover the high traffic areas of the floors, protect the wall corners, find friends to help you move in, and begin to unpack, it will be the best time to take inventory of what is actually in your home. When your wife puts her jewelry box on the dresser in your new master suite, open the box and take a photograph of its contents. Each piece of property that finds a spot in your new home can be photographed and accounted for as you move in. Now, you may ask, “Why should such a tedious inventory steal my time when all I want to do is get that computer hooked up and my smart t.v. mounted on the wall?”.
The answer is… even after you’ve made the most significant purchase in your life, you have an equally important expenditure to make ahead of you: homeowner’s insurance. It may sound dull, but insurance to protect your home and the property it contains is not only mandatory by some mortgage lenders, but will provide necessary personal protection that you will never regret purchasing. Taking an inventory (pictures are a valid record) with you to talk with your insurance agent will help you decide the level of insurance that’s right for you. You’ll be paying for the assurance that your home and your belongings are covered, just in case.
The average price of homeowner’s insurance is about $1,000.00/year. You can shop around for the best coverage for the least amount, but if you are pleased with your auto insurance, you may find that bundling your new home insurance with your auto insurance will offer you discounts on both.
When you close on a new home, you’ll have a choice of allowing the mortgage holder to set up an escrow account with which you would pay a monthly fee for your homeowner’s insurance. This is a strategic opportunity because the lender has access to these funds in escrow and will send your payment annually, with plenty of time for the insurance company to receive the funds and keep your policy in good standing. This way, you can divide your insurance payments into smaller, more manageable payments, and your lender makes sure your responsibility is met… a win-win!
This insurance will cover your house, the property inside and out, liability, medical payment to others, and loss of use. You will discuss and decide with your agent how much insurance you need, and what deductibles are acceptable. So, if your sprinkler valves get stuck and your basement floods, you may need to file an insurance claim to get your home repaired and possibly get funds to stay in a hotel until the house is safe.
You may be a victim of theft from your home or backyard and need to file a claim. Maybe your dog has a protective streak and bites a person who comes onto your yard and yes, you may need to file a claim. The mailman may slip on ice on your front porch and need medical care, in which case, you may need to call your insurance agent to file a claim. So, just like car insurance that covers you for liability and damage, a healthy homeowner’s policy is insurance against damage and/or loss of your most significant investment.
Owning a home will give you a sense of freedom; you can paint that wall any color you want! You can put bolts through the sheetrock to hang your 85” t.v.! You can mow the lawn on the day of the week and if you want to start a garden in the backyard… well you can do that too! You no longer answer to a landlord, because you are now the property owner. However, with great freedom comes great responsibilities (to botch a legendary line of dialogue from Spiderman), responsibilities of maintenance. You can choose to purchase a home warranty plan that will cover appliances and systems in your new home that are not covered by your homeowner’s insurance plan. Today’s appliances do not carry long-term warranties and it can be a financial shock to your monthly budget if both the refrigerator and the oven need repair or replacement at the same time. Whether you see the value in a home warranty policy or not, it would be a great idea to set aside some money for unforeseen maintenance expenses that are sure to rear their ugly heads (usually at the least opportune moments)!
Having moved into your new home is an exciting experience that you will always remember as a special life event — the year you bought your house, insured it, and called it home.